WB links government officials, politicians to bid rigging

The World Bank (WB) not only indicted seven contractors for allegedly manipulating three biddings for road projects worth $33 million it had offered to finance; it also linked politicians and government officials to the manipulation.

In its four-page decision on the case of the seven contractors, the WB accused them of engaging in “fraudulent practices,” including “misrepresentation of facts to influence the procurement (bidding) process for one or more procurement packages.”

“In addition, they include participation in a collusive scheme, also involving politicians and government officials, whereby awards were directed to particular contractors in exchange for bribes, kickbacks and payments to designated losing bidders,” the WB said.

Three of the seven contractors are Filipino companies, while four are Chinese firms.

The Filipino contractors are E. C. de Luna Construction Corp., owned by Eduardo de Luna, which the World Bank blacklisted permanently; and Cavite Ideal International Construction and Development Corp. and CM Pancho Construction, Inc., which were each barred from participating in WB projects for four years.

Unlike construction firms participating in biddings for its projects which it can identify and sanction, the WB did not name the politicians and government officials it linked to bid manipulation and who it said were taking bribes and kickbacks.

The officials are presumably from the Department of Public Works and Highways (DPWH), the agency implementing WB-financed projects that conducted the three failed biddings for the $33-million worth of roads between 2002 and 2006.

The WB withdrew its funding offer after discovering evidence of bid manipulation.

During the second hearing of the House committee on public works on the blacklisting of the seven contractors last Wednesday, Nueva Vizcaya Rep. Carlos Padilla suggested that the Philippine government should ask the World Bank for the names of politicians and government officials and its evidence against them.

“We should be interested in finding out who these people are. In fact, we must prosecute them,” he said.

Padilla said it is reports about corruption from international agencies like the WB that give the Philippines the reputation as one of the most corrupt countries in the world.

Less than two hours after Padilla made the appeal, the hearing panel chaired by Leyte Rep. Roger Mercado cleared the seven blacklisted contractors.

Mercado said his committee found no evidence that the contractors were engaged in fraudulent and collusive practices as the WB had accused them of doing.

Over the weekend, Sen. Aquilino Pimentel Jr. said a WB official in Washington D.C. has told him that they are willing to furnish the government the evidence they have against the contractors.

“According to him, we can have access to all these pieces of evidence for the purpose of prosecution. At this point, I cannot elaborate, but there is an ongoing process for the World Bank to provide our country with solid and concrete evidence enough for prosecution,” Pimentel said.

The contractors claimed that the bank punished them without giving them a fair hearing.

The WB, however, insisted that it followed due process in deciding to blacklist the seven companies.

In 2006, after the three failed biddings for the WB-financed road projects, President Arroyo approved the recommendation of DPWH Secretary Hermogenes Ebdane for his department to take over the projects and to pursue them using its own funds.

In the succeeding biddings, E. C. De Luna Construction, one of the seven WB-blacklisted firms, won a P100-million contract for a road in the Negros provinces.

DPWH Undersecretary Manuel Bonoan told the Mercado committee last Wednesday that the WB has not yet barred the contractor from its project at the time it won the contract.

“The blacklisting was made just recently,” he said.

However, he admitted that as early as 2002, when the first bidding for the same projects that were to be financed by the WB was held, the bank had already informed the DPWH of its findings and the contractors involved.

Resume investigation

Pimentel, in the meantime, urged his colleagues yesterday to get to the bottom of the scandal and cautioned them against statements that might undermine the investigation.

He said that while Senate President Juan Ponce Enrile might be correct in saying that Sen. Panfilo Lacson’s revelations about the connection between First Gentleman Jose Miguel Arroyo and WB-blacklisted contractor Eduardo de Luna might be considered hearsay at this point, it created the impression there was an effort to disparage the evidence.

“What he said may be technically, legally correct. But then its implication is that, let us put a stop to the hearing,” Pimentel said.

He said it was unfortunate that the Jan. 27 hearing lasted only for two hours and Lacson, together with the other members of the Blue Ribbon committee, was not able to pursue his questioning of De Luna and other witnesses-resource persons.

The Senate minority leader suggested that the inquiry be resumed.

“The investigation should be resumed at once to give the persons concerned the full opportunity to produce the necessary evidence,” Pimentel said.

Sen. Miriam Defensor-Santiago, chairperson of the Senate economic affairs committee leading the investigation, said she would call another hearing if Lacson could present his witness on the alleged P70-million bribe given by contractors to a powerful person close to Malacañang holding office at LTA Building in Makati City.

Santiago gave Lacson two weeks to present his witness.

De Luna denied he was the one carrying the bribe in a carton box or that it was for the First Gentleman in exchange for a P1.4-billion road project.

In a statement, Pimentel stressed that the Senate, the Office of the Ombudsman and other investigating agencies concerned must be able to secure from the WB all the documentary and testimonial evidence that served as its basis for debarring three Filipino contractors from its infrastructure projects.

He said it would be through an inquiry that the Senate could validate the findings and conclusion of the World Bank that the three construction companies – E. C. de Luna, Cavite Ideal and CM Pancho – were engaged in “collusive and corrupt” practices in bidding for public works projects that prompted the bank to blacklist them.

Pimentel said it was deplorable that the three contractors blacklisted by the WB were not barred from bidding for projects as long as these were not funded by the bank.

“The World Bank has debarred the erring contractors for life, and we suspend them only for 15 days, it’s as if we are playing around with our laws,” he said. —Aurea Calica